November 2, 2009

My new VDARE.com article explains how, while researching the mortgage meltdown, I stumbled into one of the larger legal issues of the day: are Federal Reserve Banks subject to the Freedom of Information Act?

Bloomberg News has successfully taken to court the Fed's bizarre-sounding contention that while the Freedom of Information Act does apply to the the Fed's Board of Governors, it doesn't apply to regional Federal Reserve banks. But Mayor Bloomberg has more money than I do to wage a legal battle against an entity that can create money out of thin air. Do I have a legal leg to stand on?

Many legal experts said bringing claims against the Fed would be an uphill battle, because the Fed would qualify under a long-held standard of sovereign immunity. That concept generally holds that the government can't be held legally accountable for its actions.

The court-appointed examiner is investigating an issue that has angered many of Lehman's creditors: how the Federal Reserve and the New York Fed were paid promptly and in full, while tens of billions of dollars in other debts were left to be sorted out in court. Above, the former headquarters of Lehman Brothers, now offices for Barclays Capital, in New York last month.

Overall, the New York Fed lent Lehman $46.2 billion in cash and Treasury securities for $50.6 billion in collateral, according to Federal Reserve affidavits filed in bankruptcy court. As a result of Lehman's sale to Barclays PLC following its bankruptcy, the New York Fed was later paid back in cash, with the Treasury securities returned.

One Lehman creditor said the concern is "whether the government used its power and influence to make sure it got paid back in full, while the rest of us get dimes on the dollar."

http://tinyurl.com/ybqa9fs

'Do I have a legal leg to stand on?'

Bring a lawnchair. As with Charles Ponzi, protege Madoff or Social Security..line forms at the end.

To live outside the law you must be honest, inside the law a crook (three felonies a day), above the law a lawmaker.

Bloomberg wants to know what they did with the money, Lehman creditors how they took the money, Stevil how they lost the money, begging the question what is the money.

In function, the federal reserve banks are operations of the federal government; even though Congress created different rules for them, they were nevertheless created by Congress, and the residual profits of the federal reserve banks go to the United States Treasury.

But the court never answered that question in the Bloomberg case. The judge said that in order to answer that question, Bloomber would have had to sue the FRBNY directly.

Bloomberg News has successfully taken to court the Fed's bizarre-sounding contention that while the Freedom of Information Act does apply to the the Fed's Board of Governors, it doesn't apply to regional Federal Reserve banks.

Bizarre? This would seem to me to be right in line with that old criticism of the Fed, that it's nothing more than a bundle of private banks; you know, "the Governors are federal appointees, but that's as far as it goes" sort of thing?

Not only does the Federal Reserve System consider itself beyond the Freedom of Information Act, they (through their lapdog, beltway politicians) have insured that even the U.S. congress' own Comptroller General and the General Accounting Office can't have access to their books.

That's not to say that a lawsuit might not be a good idea. But considering the stakes involved, a suit that appeared to have a fighting chance might get you re-classified from a "nuisance blogger" to "enemy of the state".(That's assuming they didn't just put out a contract on you.)

I suggest that you refrain from doing this. Even if the other decision gives you a "leg to stand on", the other side will no doubt be able to manufacture some issue which distinguishes the New York case from yours. Unless you're planning on retaining a very expensive law firm, the judge is likely to see you as a crank. So, you'll either be tossed out or bogged down so bad, you'll wish you never tried.

I do know that if I want a bureacrat to do something, I ask him to do it. He says maybe. (This always happens). Then I ask my congressman to send him an attaboy for going above the call of duty to do what I want. (Congressmen send this sort of letter a lot). Then with an attaboy from a Congressman in his file, he has the clout to ask his boss to do it.

Perhaps they balked after Googling your name and seeing that your political orientation is opposite to theirs. Maybe using a pseudonym would produce better results in such situations. Or you could ask someone else to do it and then, if questioned, say that this person was your assistant.

Steve, if the data you ultimately get supports it, I wonder if you could write something about this recession being caused by IQ, in addition to being a Diversity and Estrogen recession.

You wrote in one piece about how society needs simple rules for the mediocre IQ (80-95) population to follow. I suspect a lot of the exotic mortgages were taken out by people who simply didn't understand them and had no business getting involved in complicated financial products over a need as basic as housing. Obviously, the Fed doesn't have IQ scores of borrowers, but reasonable estimates could be imputed from other data that might be.

The likelihood that people with mediocre IQs were the primary victims isn't just based on racial assumptions. A lot of the exotic holders were intending to "fix it and flip it;" since home construction and repair can be good a career for those with mediocre IQ's, a lot of intended investors probably fall in that group.

Half Sigma says:"functionally they serve the 'interests' (har-dee-har-har) of the banking industry."

That's like saying that the army serves the interest of military contractors, and that the Department of Education serves the interests of college professors.

It's called regulatory capture. Regulators often come to serve the interests of their regulated industries. It's not even the least bit outlandish of an idea. Wikipedia has a page on it.

Public Utilities Commissions usually serve the interests of utilities. As you say, DoD serves the interests of defense contractors. Dept of Ed serves the interests of teachers unions. The Civil Aeronautics Board served the interests of airlines. The ICC served the interests of the trucking and railroad industries. Etc.

Didn't your law school require you to take any economics or law and economics courses? Ask for your money back.

You're not seriously suggesting that SEC, Treasury, the Fed, and etc have NOT been serving the interests of investment bankers recently, are you?

Steve, do you even need a lawyer? You're a smart guy with good verbal skills and you know the issues intimately. I'd say your request is a plain moral issue. It's not some intricate financial deal where smart and expensive lawyers can obfuscate the truth and get away with a white lie.

Why don't you just step up to the plate and challenge this corrupt Goliath? If a judge rules against you, he and the Fed have morally lost coz your case is so clear.

...The most frequent visitor included in the narrow sample was Andy Stern, president of the Service Employees International Union and Mr. Obama’s top ally in the labor movement. Mr. Stern visited the White House 22 times, sometimes for health care or other public events in the East Room, other times for meetings with the president or aides like Rahm Emanuel, Peter R. Orszag or Ronald A. Klain...

Previous appearances of Mr. Stern in the news:

New Labor Leaders Take a Page From HistoryBy Nathaniel PopperPublished April 23, 2009, issue of May 01, 2009forward.com

If you want to see the movers and shakers behind the tumult in today's labor movement, the place to be is Stephen Lerner and Marilyn Sneiderman's modest home in Washington after sunset concludes Judaism's holiest day of the year...

Last October, those partaking in the potluck collection of bagels, blintzes and a giant challah included Andy Stern, president of one of the nation’s largest union, the Service Employees International Union...

"It seemed like every other person there was a senior leader in the labor movement," said a somewhat awed Jacob Feinspan, the young Jews United for Justice leader, who attended the 2008 event...

A major turning point came when the AFL-CIO, the largest federation of national unions, decided to open up the Organizing Institute, which was designed to provide college graduates a direct entry point into unions so that they would not have to first pass through the rank and file. The institute was founded in 1989 by a young Jew from Kentucky, Richard Bensinger, who had been recruited into the union movement by Richard Rothstein, a Jewish labor organizer and activist at one of the garment unions...

But there is a potential downside: Stern and others in the new generation of union leadership have been criticized by more traditional union leaders for giving union jobs to people who did not get their start in the working class. The generation of college-educated leaders have also been involved in a number of recent fights that have divided the labor movement (see sidebar). Paul Buhle, a labor historian at Brown University, said that in the current era, when unions are largely trying to organize black and Latino populations, the presence of so many educated Jewish leaders can be an "embarrassing detail"...

ACORN's "Muscle for Money" does the bidding of SEIUKevin MooneyJuly 7, 2009sfexaminer.com

Corporate and political officials who defy workplace and community organizers risk being made objects of scorn by bright red-clad protestors in public and private, courtesy of an activist union and its close allies in the nation's most controversial liberal non-profit advocacy group.

It's officially called the "Muscle for Money" program within the Service Employees International Union (SEIU) where it was started, and unofficially by the same name among activists of Association of Community Organizers for Reform Now (ACORN)...

The McDash data set does not contain borrower race or ethnicity information. To make an educated guess about a borrower's race, you have to try to match each McDash loan record to its probable mate in another vendor's data set which does contain information on race. The data sets used by Federal Reserve researchers to pull of that trick are subject to tight licensing restrictions on to whom and in what form derived information can be transmitted to non-subscribers. It is very likely that this is one hurdle in the way of your obtaining the data you seek. The Federal Reserve has lost its subscription rights to some valuable data sets in the past due to just this sort of dispute, and is likely not too keen on losing another in the current crisis environment.

Furthermore, once such a merged table is created, researches run SQL queries to create the cross-tabulation underlying the chart in your article. The information you are interested in is essentially a cross-tabulation at a lower level of aggregation than the one used to produce that chart. You seem to be implicitly assuming that the data you want at some time must have resided on some researcher's hard drive. That's not necessarily the case ... it perhaps fleetingly existed in some machine's memory while the SQL query was executing, but never saved as, from the researcher's perspective, there was no point in saving intermediate data used to produce the tabulation requested. If the researcher had wanted a cross-tabulation at the level of aggregation you'd like to see, in all probability a different SQL query would have been executed. The existence of that chart does not imply anything about whether the SQL query you want was ever executed. For this reason, the FRB's first excuse---that the data does not currently exist in the form blah, blah, blah----is most likely a legitimate one.

Unless the Freedom of Information Act trumps commercial contracts, I suspect you are legally SOL.

Oh, c'mon. I'm not asking for data at a different level of aggregation, I'm asking for 58 unadjusted numbers that they used to come up with their adjusted numbers. They couldn't possibly have calculated the adjusted numbers without having the unadjusted numbers.

As for the "restrictions in the contract" theory, they've had numerous opportunities to claim that in correspondence with me and they haven't. Why not? Most likely because there are no such restrictions.

Calling it a different level of aggregation was an error on my part. I should have written adjusted versus unadjusted. Nonetheless, you are assuming that the 58 numbers you want at some time resided on someone's hard drive; that they had to have had those numbers to produce the adjusted numbers in that paper. That's not necessarily the case; in my opinion, unlikely the case. If you have a friend who's a SQL guru, ask whether or not these adjustments and cumulations could have been done entirely with a SQL script, executed on some networked database server, with unadjusted numbers never finding their way to the researcher's hard drive. The answer should be sure!

In any case, the licensing issues are real and potentially could hinder the FR's ability to comply with your request. It might sound silly, but there's a world of contractual difference between publishing summarized proprietary data in a research paper and performing a related query against proprietary data for a curious non-subscriber.

Here's the Google Wallet FAQ. From it: "You will need to have (or sign up for) Google Wallet to send or receive money. If you have ever purchased anything on Google Play, then you most likely already have a Google Wallet. If you do not yet have a Google Wallet, don’t worry, the process is simple: go to wallet.google.com and follow the steps." You probably already have a Google ID and password, which Google Wallet uses, so signing up Wallet is pretty painless.

You can put money into your Google Wallet Balance from your bank account and send it with no service fee.

Google Wallet works from both a website and a smartphone app (Android and iPhone -- the Google Wallet app is currently available only in the U.S., but the Google Wallet website can be used in 160 countries).

Or, once you sign up with Google Wallet, you can simply send money via credit card, bank transfer, or Wallet Balance as an attachment from Google's free Gmail email service. Here'show to do it.

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